Youth jobless crisis could have lasting impact

By Chavon Sutton, staff reporterMay 26, 2010: 2:26 PM ET

NEW YORK (CNNMoney.com) -- The recession has fueled a record level of unemployment among young workers and is likely to have a lasting impact on their job prospects, according to a congressional report released Wednesday.

The Joint Economic Committee's (JEC) report found that one in five workers between the ages of 16 and 24 was unemployed in April, even as the economy showed signs of recovery, adding more than 570,000 jobs during the first four months of the year.

The youth unemployment rate of 19.6% is the highest for the age group since the government began tracking the data in 1947, the JEC said.

"This new JEC report makes clear that young workers have been hit hard and are still being hit hard by the Great Recession," said committee chairwoman Rep. Carolyn Maloney, D-N.Y., in a prepared statement.

Young workers have been disproportionately impacted by the recession. Although 16-24 year-olds make up 13% of the labor force, they represent 26% of the unemployed, according to the report. And 16 to 17 year olds fared worse, with a 29% unemployment rate.

"Unemployment spells early in a young person's work life can have lasting negative effects on future earnings, productivity and employment opportunities," the report said.

One way to combat joblessness is greater education, the committee found. College graduates experienced the lowest unemployment rate at 8%, compared to high school drop outs who have the highest level of unemployment at 33%.

But the benefits of college education were not uniform across different groups. Minorities still faced higher unemployment rates than other college graduates, the committee found. For example, black college graduates had a 15.8% unemployment rate in April, nearly double the rate of all college graduates.

At a hearing Wednesday with a panel of experts, the bolstering of summer employment programs was seen as one way of dealing with the problem.

"Summer employment is a rare opportunity to connect young people to the world of work," said David Jones, president and chief executive officer of Community Service Society in New York. Historically it has been a "wasted opportunity with limited money."

He added that employers should aim for more rigor during the summer experience, requiring young workers to be on time and giving them performance reviews, as is done in the real world.

A bill now before the House is aimed at combatting youth unemployment. If passed, the legislation would provide resources to support over 350,000 jobs for 16 to 21 year-olds through summer jobs programs.

The price tag of the bill is about $1 billion over the next 10 years and would allow local so-called Workforce Investment Boards to expand successful summer jobs programs that were funded in the nearly $800 billion stimulus that was passed last year.

But even if new programs and educational reform are implemented now, young workers are likely to feel the repercussions of this recession, through reduced earnings, 10 to 15 years from now, the committee said.

"It's going to be a slow, long climb to creating jobs in the economy," said Maloney.